Postal Service Reports a Decline in Losses

WASHINGTON — Aggressive cost cutting and increased revenue from its packing and shipping business helped the Postal Service stem its losses in the first quarter of its fiscal year, which ended Dec. 31.

The Postal Service posted a $354 million net loss in the first quarter, compared with a $1.3 billion loss over the same period in 2012. The first quarter has traditionally been one of its strongest periods because it includes the Christmas holidays, when the agency experiences an increase in the number of packages and letters mailed.

Total mail volume, however, continued to decline. It was 42 billion pieces for the quarter, down from 43.5 billion for the same period a year earlier, according to agency officials.

Revenue from first-class mail, which provides the bulk of the revenue for the Postal Service, declined $209 million, or 2.8 percent, from the same period the previous year, with a decrease in volume of 817 million pieces, or 4.6 percent.

The agency’s shipping and packaging business increased by $479 million, or 14.1 percent, over 2013 first-quarter results, fueled by the growth of online shopping, Sunday deliveries in limited markets and aggressive marketing campaigns to promote the shipping services, postal officials said.

Post office officials said it was the 19th time in the last 21 quarters that it had lost money and called on Congress to pass legislation that would allow the agency to make changes to its business model, such as ending Saturday mail deliveries.

“The Postal Service is doing its part within the bounds of law to right-size the organization, and I am very proud of the achievements we have made to reduce costs while significantly growing our package business,” said Patrick R. Donahoe, the postmaster general. “We cannot return the organization to long-term financial stability without passage of comprehensive postal reform legislation.”

A Senate committee on Thursday passed a bill that would help reform the financially strapped agency. The bill, passed by the Homeland Security and Governmental Affairs Committee, would allow the post office to end Saturday delivery and a recent temporary increase in the cost of stamps would be made permanent. The post office would also be allowed to ship beer and wine, something it is currently prohibited from doing.

The legislation would also make changes to a 2006 law that requires the Postal Service to pay nearly $5.5 billion a year for health benefits to future retirees, a mandate that is not imposed on any other agency. The post office has defaulted on three payments since 2012.